Capitalism, like all systems, is constantly evolving. For centuries, it has faced criticism, with intellectual and social movements calling for its complete annihilation, or hoping for it to be superseded, or more modestly, to be reformed. Milton Friedman may have railed that the business of business is business but that hasn’t stopped generations of thinkers and entrepreneurs to come up with ways to achieve both profit and social impact.
We’ve seen corporate social responsibility as an early attempt by businesses to formalise their charitable efforts. The sustainable development movement sought to ensure that private sector companies internalise the impact of their activities on the environment and society. Then businesses were to be measured on their triple bottom lines. And more recently, social entrepreneurship put forth the idea that social good can be embedded into the business model, as opposed to being a happy consequence of profit-making activities. It is undeniable that the way business is conducted has changed. But many of these developments have been co-opted in ways that risk making them mere buzzwords without making a fundamental change in society. The disjuncture between company social reports and the experiences of many mining communities is a case in point.
South African businesses have often been eager adopters of these capitalist mutations. But it’s hard to argue that the country has provided intellectual leadership on this front. This is quite strange, given the way in which the role of business in society was interrogated throughout the struggle against apartheid. Add to that a diverse country, with prosperity rubbing shoulders with dire needs, and a vibrant democracy with healthy debate and one begins to expect more than followership. This country should surely be the world’s laboratory for new ways of thinking about the future economy.
In Peers Inc., Robin Chase, the founder of car-sharing service Zipcar, argues that the latest evolution of capitalism is towards the collaborative or sharing economy. This mode of creating value is facilitated by open platforms that connect independent creators, producers, workers on the one hand; and customers on the other. These peers use the platform to exchange goods, services and information according to their specific need, on demand, outside the dictates of standardised and hierarchical old-style institutions. Uber has become the category-defining business of the sharing economy.
But the argument advanced by Chase and others is that the sharing economy is not just about disrupting old-style industries as Uber has done, but that it can also solve great social problems and empower consumers and independent producers. “Chris Anderson couldn’t determine Jordi’s age from their online exchange, nor gauge his accent or assess his social background or lack of academic pedigree”, Chase writes on how the former celebrated editor of Wired magazine and best-selling technology author came to approach Jordi Muñoz, a talented ‘amateur’ developer, who also happened to be a university drop-out and Mexican immigrant without a green card, to form a robotics company.
Platforms not only draw the wisdom and energy of the crowd, they can break down barriers, so the argument goes. This is an attractive proposition for a country like ours. How do we build platforms that build bridges between the formal and informal, black and white, mature and young, time rich and time poor?
Local entrepreneurs are taking up the challenge. If one looks at emerging companies such as SweepSouth (on-demand home cleaning services), Obami (social learning), Locomute (car sharing) or City Soirée (crowd-funding creative events), one sees a desire to rewrite the rules in established industries in a way that enhances social value. It’s early days for these entrepreneurs but in a highly concentrated economy with high barriers to entry, these start-ups are opening up new ways to work, create or access resources. We especially need those platforms that build bridges across South Africa’s dual economy as they hold the best prospects for reducing unemployment and inequality.
Trudi Makhaya is CEO of Makhaya Advisory.
This column first appeared at Business Day here